nep-ino New Economics Papers
on Innovation
Issue of 2010‒07‒31
seven papers chosen by
Steffen Lippert
School of Economics and Finance, Albany Campus

  1. R&D Subsidies, Spillovers and Privatization in Mixed Markets By Maria José Gil Moltó; Joanna Poyago.Theotoky; Vasileios Zikos
  2. Success in Pharmaceutical Research: The Changing Role of Scale and Scope Economies, Spillovers and Competition By Tatiana Plotnikova
  3. Productivity and Heterogeneous Knowledge: Exploring the Relationship in a Sample of Drug Developers By Giulio Bottazzi; Tatiana Plotnikova
  4. The importance of Intermediaries organizations in international R&D cooperation: an empirical multivariate study across Europe By Aurora A.C. Teixeira; Margarida Catarino
  5. Scope of Innovations, Knowledge Spillovers and Growth By Gray, Elie; Grimaud, André
  7. On measuring scientific influence By Ravallion, Martin; Wagstaff, Adam

  1. By: Maria José Gil Moltó; Joanna Poyago.Theotoky; Vasileios Zikos
    Abstract: We examine the use of subsidies to R&D in a mixed and a private duopoly market. We show that the socially optimal R&D subsidy is increasing in the degree of spillovers but it is lower in the private duopoly. The optimal R&D subsidy leads to an increase in total R&D and production, however, it does not lead to the equalisation of per firm output and therefore to an efficient distribution of production costs. We also find that privatization of the public firm reduces R&D activity and welfare in the duopoly market. This result stands even when optimal R&D subsidies are provided.
    Keywords: mixed duopoly; process innovation; R&D subsidies; privatization; spillovers.
    JEL: L31 L32 O38 L13 L50
    Date: 2010–07
  2. By: Tatiana Plotnikova (DFG Research Training Program "The Economics of Innovative Change", Friedrich-Schiller-University Jena, Germany)
    Abstract: This paper investigates the determinants of success in the development of new drugs. In specific, it explores the factors of success in drug development programs at different stages of innovation process. We use economies of scale, scope, R&D competition and technological spillovers as explanatory variables and test whether the effect of these variables on the success of a project differs in relation to the discovery and development stages of innovation, respectively. Our main finding is that spillovers, including spillovers from collaboration, are important in explaining the success of projects during the discovery stage of innovation, while in the later development stage, the effects of competition outweigh any benefits from spillovers.
    Keywords: economies of scale and scope, spillovers, competition, R&D, innovation process
    JEL: O32 L25 L65
    Date: 2010–07–26
  3. By: Giulio Bottazzi (Sant'Anna School for Advanced Studies, Pisa); Tatiana Plotnikova (DFG Research Training Program "The Economics of Innovative Change", Friedrich-Schiller-University Jena, Germany)
    Abstract: This paper aims to investigate the effect of knowledge characteristics on the total factor productivity of firms developing drugs in the pharmaceutical industry. We decompose knowledge into knowledge associated with the technological firm portfolio and knowledge related to R&D projects, which represent drug development at the clinical testing stage. The latter is attributed to the knowledge of relevant markets where the drugs will be sold. The results show that the effect of technological coherence vs. market coherence and of accumulated knowledge on the productivity of firms differs. Productivity increases with the number of patents and decreases with the patent diversity and project portfolio coherence. When considering only the project knowledge, the diversity of the project portfolio positively affects productivity.
    Keywords: total factor productivity, diversity,,coherence, knowledge
    JEL: D24 O32 L25 L65
    Date: 2010–07–26
  4. By: Aurora A.C. Teixeira (CEF.UP, Faculdade de Economia, Universidade do Porto; INESC Porto; OBEGEF); Margarida Catarino (IAPMEI; Faculdade de Economia, Universidade do Porto)
    Abstract: Despite the large number of publications related to business cooperation in R&D and the wide perception of the importance of intermediary institutions in the R&D cooperation process, empirical studies on its role are scarce, scattered and fragmented. Moreover, the academic work developed in this area is basically of a theoretical nature, whereas the international perspective of R&D cooperation is seldom approached. Departing from a unique database that includes 473 R&D cooperation projects developed within the 6th Framework Programme, involving firms and intermediaries from all European Union countries, this paper gauges the determinants of the importance attached to Intermediaries, through a direct survey to the organizations involved. Based on an estimation of the multivariate model, this study demonstrates that the importance given to Intermediaries depends more on project features than on the characteristics of the participating organizations. In particular, the nationality of participating organizations and the promoter emerged with a strong explanatory power: ceteris paribus, projects with at least one participant from the United Kingdom tend to assign greater importance to intermediaries in international R&D cooperation. Unambiguously, results evidence that the innovating capacity of an organization emerges (both positively and significantly) associated with a greater importance attached to Intermediaries.
    Keywords: R&D Cooperation; Intermediaries; International projects; Europe
    Date: 2010–07
  5. By: Gray, Elie (Toulouse Business School and Toulouse School of Economics (LERNA)); Grimaud, André (Toulouse School of Economics (IDEI, LERNA) and Toulouse Business School)
    Abstract: This paper exploits the formalization of a circular product differentiation model of Salop (1979) to propose an endogenous growth quality ladder model in which the knowledge inherent in a given sector can spread variously across the sectors of the economy, ranging from local to global influence. Accordingly, this affects the size of the pool of knowledge in which innovations draw themselves on in order to be produced. Therefore, the law of knowledge accumulation, and thus the growth rate of the economy, depend positively on the expected scope of diffusion of innovations, i.e. on the intensity of knowledge spillovers. This approach generalizes the endogenous growth theory as developed in the seminal models of Grossman & Helpman (1991) and Aghion & Howitt (1992), extending their analysis to the possibility of considering stochastic and partial knowledge spillovers. This framework allows us to mitigate the positive externality of knowledge and thus to apprehend the issue of the funding of research with more parsimony. We characterize the set of steady-state Schumpeterian equilibria as a function of the public tools. We provide an explanation for the fact that research effort can either be suboptimal or over-optimal, depending on the expected scope of knowledge. Accordingly, we find that the optimal public tool dedicated to foster R&D activity depends positively on it.
    Keywords: Schumpeterian growth, scope of diffusion of innovations, knowledge spillovers
    JEL: O30 O31 O41
    Date: 2010–03
  6. By: Renaud Bourlès (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579); Gilbert Cette (BDF - banque de france - Banque de France, DEFI - Université de la Méditerranée - Aix-Marseille II); Jimmy Lopez (BDF - banque de france - Banque de France); Jacques Mairesse (CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique); Giuseppe Nicoletti (Economics Departement - OECD)
    Abstract: The paper focuses on the influence of upstream competition for productivity outcomes in downstream sectors. This relation is illustrated with a neo-Schumpeterian theoretical model of innovation (Aghion et al., 1997) with market imperfections in the production of intermediate goods. In this context, upstream market imperfections create barriers to competition in downstream markets and upstream producers use their market power to share innovation rents sought by downstream firms. Thus, lack of competition in upstream markets curbs incentives to improve productivity downstream, negatively affecting productivity outcomes. We test this prediction by estimating an error correction model that differentiates the potential downstream effects of lack of upstream competition in situations close and far from the global technological frontier. We measure competition upstream with regulatory burden indicators derived from OECD data on sectoral product market regulation and the industry-level efficiency improvement and the distance to frontier variables by means of a multifactor productivity (MFP) index. Panel regressions are run for 15 OECD countries and 20 sectors over the 1985-2007 period with country, sector and year fixed effects. We find clear evidence that anticompetitive regulations in upstream sectors have curbed MFP growth downstream over the past 15 years. These effects tend to be strongest for observations (i.e. country/sector/period triads) that are close to the global technological frontier. Our results suggest that, measured at the average distance to frontier and average level of anticompetitive regulations, the marginal effect of increasing competition by easing such regulations is to increase MFP growth by between 1 and 1.5 per cent per year in the OECD countries covered by our sample. Our results are robust to changes in the way MFP and the regulatory burden indicators are constructed, as well as to variations in the sample of countries and/or sectors.
    Keywords: Productivity, Growth, Regulations, Competition, Catch-up
    Date: 2010–07–20
  7. By: Ravallion, Martin; Wagstaff, Adam
    Abstract: Bibliometric measures based on citations are widely used in assessing the scientific publication records of authors, institutions and journals. Yet currently favored measures lack a clear conceptual foundation and are known to have counter-intuitive properties. The authors propose a new approach thatis grounded on a theoretical"influence function,"representing explicit prior beliefs about how citations reflect influence. They provide conditions for robust qualitative comparisons of influence -- conditions that can be implemented using readily-available data. An example is provided using the economics publication records of selected universities and the World Bank.
    Keywords: Information Security&Privacy,Economic Theory&Research,Information and Records Management,Tertiary Education,Knowledge for Development
    Date: 2010–07–01

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